What is Debt Market? Mention its segments in India?

1.	What is Debt Market? Mention its segments in India?
Answer» Debt market refers to the financial market where investors buy and sell debt securities, mostly in the form of bonds. There are three main segments in the debt markets in India, viz., (1) Government Securities, (2) Public Sector Units (PSU) bonds, and (3) Corporate securities. The market for Government Securities comprises the Centre, State and State-sponsored securities. In the recent past, local bodies such as municipalities have also begun to tap the debt markets for funds. Some of the PSU bonds are tax free, while most bonds including government securities are not tax-free. Corporate bond markets comprise of commercial paper and bonds. These bonds typically are structured to suit the requirements of investors and the issuing corporate, and include a variety of tailor-made features with respect to interest payments and redemption.

Answer»

Debt market refers to the financial market where investors buy and sell debt securities, mostly in the form of bonds.

There are three main segments in the debt markets in India, viz.,

(1) Government Securities,

(2) Public Sector Units (PSU) bonds, and

(3) Corporate securities.

The market for Government Securities comprises the Centre, State and State-sponsored securities. In the recent past, local bodies such as municipalities have also begun to tap the debt markets for funds. Some of the PSU bonds are tax free, while most bonds including government securities are not tax-free. Corporate bond markets comprise of commercial paper and bonds. These bonds typically are structured to suit the requirements of investors and the issuing corporate, and include a variety of tailor-made features with respect to interest payments and redemption.

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